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Corona and oil will cause fiscal deficits in most Gulf countries in 2021
Information / follow-up.
Credit rating agency Fitch said that the spillover effect of the Covid-19 pandemic and the sharp drop in oil prices last year will lead to deficits for most Gulf governments.
Countries in the region are expected to witness an improvement in their financial conditions thanks to the recovery of oil prices and the easing of production restrictions, but the deficit will remain large, especially in Kuwait and Bahrain. "We expect only Abu Dhabi and Qatar to achieve fiscal surpluses," Fitch said in a report.
Fitch expects Brent to average $ 58 this year, but its long-term forecast is at $ 53.
Fitch's estimates indicated that Bahrain needs a price of about $ 100 a barrel to achieve a balance in the 2021-2022 budget, Kuwait needs more than $ 80, and Saudi Arabia and Oman need about $ 70.
Brent is trading at around $ 66 today.
In addition to oil revenues, the Coronavirus continues to put pressure on the coffers of the Gulf states, and some countries have re-imposed restrictions on economic activity.
"A new wave of infections continues to hamper growth in income from abroad, public finances, employment and domestic product," Fitch said.
The agency expects Abu Dhabi to record a 1.1% fiscal surplus, and Qatar to record 2.4% of GDP. While I expected Saudi Arabia, the largest economy in the Gulf, to have a deficit of 5.3% ..
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